Sam Altman (in)famous OpenAI founder posted on social media a picture of an elegant A frame wooden building in a lush tropical setting.
It looks like the weekend home of a billionaire. The image is actually the putative design of a small (nuclear), modular reactor that Altman, the company he chairs since 2015, invented. It was posted as Oklo had just merged into a special-purpose acquisition company created by Altman, Klein and the Wall Street dealmaker Michael Klein. The combined entity is valued at $850mn.
Some observers will wince. The acronym “Spac”, which was once a harmless term, became toxic in the past two years because of the concept had been abused at the height of the credit bubble. The addition of “nuclear”, given the Chernobyl, Fukushima, and current Russian threats against Ukraine’s Zaporizhzhia nuclear plants, could make the acronym even more radioactive.
Investors and policymakers need to pay attention. The United States Air Force announced on Thursday that it plans to use Oklo’s reactor at the Eielson Air Force base in Alaska. This is the first time the Federal Government has used commercial SMRs.
SMRs are gaining in popularity and investor interest elsewhere. Bill Gates-backed TerraPower is also working on reactors. NuScale is also developing reactors. It listed on a Spac in the past year, and recently received$275mn from a variety of government funding for a Romanian Project.
GE Hitachi and Rolls-Royce, both of Britain, are building SMR plants in Canada. Last month, Britain held an international competition to find the best SMR technology. It pledged to generate “up to 25% of UK electricity by 2050 from homegrown nucleic energy”.
Three factors are driving this. The first is the recognition that electricity demand will increase in the coming years due to global growth, and that digital innovations like AI require “a lot” more electricity. Altman acknowledges that this creates an “urgent need for tons and tonnes of cheap, clean, safe energy at scale”.
The use of fossil fuels for electricity generation will increase global warming. However, renewable sources such as solar and wind can’t fill the gap unless major advances in battery storage are made.
Thirdly, nuclear technology has evolved. The 20th century saw the creation of massive power plants, which were expensive and took a long time to construct. For example, the cost of Britain’s planned Hinkley Point C nucleo-power station has risen to £32bn while that for America’s new Vogtle plantshas more than doubled, from $14bn up to $30bn.
SMRs, which are smaller and built using factory-produced designs are cheaper, faster, and more portable. They can also be placed closer to the demand for electricity. The technology developed by Oklo, TerraPower, and other companies uses nuclear waste to fuel the reactors, which could reduce the burden of waste disposal.
Oklo officials say that if the company’s technology is adopted, “existing inventories in the US of used fuel could power the nation’s energy requirements for more than 150 years”. Jacob DeWitte tells me that this is the best method to decarbonise.
Not everyone agrees. Many environmentalists are so opposed to nuclear power that they would like not to include it in green taxonomies. Allison Macfarlane is a former US Nuclear Regulatory Commission head. She says that parts of the nuclear establishment are also against the idea of libertarians who call themselves “tech bros”, like Altman, becoming “nuclear brothers”.
She noted that “very few of the proposed SMRs are demonstrated, and none is commercially available. Let alone licensed,” in an essay she wrote recently which decries Spac structures and hype. Existing nuclear power stations play an important role in greenhouse gas emissions reductions, and will continue to. The promise of SMRs, however, is questionable.
She is right: Oklo’s first US federal license application was denied last year. DeWitte says he’ll re-apply next year and is confident about the outcome, but he admits the plants won’t start before at least 2027.
Despite these cautions, these initiatives are still welcomed by me personally. The SMR technology is unproven and Spacs’ track record is mixed. The dirty truth, however, is that climate change forces us to urgently experiment with as many clean energy ideas as we can.
While the US government was responsible for the initial explosion of nuclear innovation in western countries — as recently seen in the film Oppenheimer — the sad truth is that the public sector has become incredibly slow and risk-averse. China, Russia and Argentina are currently running the first SMR Pilots.
Let’s hope, if nothing else, that the threat of competition from “tech bros”, will encourage western governments and traditional nuclear establishment to move faster. If Oklo’s new recycling technology actually works, and can produce safe and clean power, then that would be better for not only the US Air Force but also for the rest of the world.